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Blue Cash Everyday updates: My family might have a new favorite credit card

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Man Opens Package After Delivery of Online Order
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For the past several years, the Blue Cash Preferred® Card from American Express has been my family’s go-to credit card. We upgraded from the Blue Cash Everyday® Card from American Express because, as our household grew from two people to three and now four, the higher grocery rewards justified the annual fee. But a refresh of the Blue Cash Everyday’s benefits has us thinking of switching back.

The Blue Cash Everyday now gives 3 percent cash back on up to $6,000 in U.S. online retail purchases each year. That’s a very generous rate on a key spending category that hasn’t been addressed by many rewards cards. Right now, we’re only getting 1 percent cash back on those purchases with the Blue Cash Preferred and the other card we use regularly, the Chase Freedom Flex℠.

If we switch back to the Blue Cash Everyday, our rewards rate on groceries will be cut in half. However, we will probably still come out ahead overall because of the Blue Cash Everyday’s newly expanded online retail category, its lower annual fee, a new Disney Bundle discount and the fact that I’m commuting much less than in the past.

Here’s a complete breakdown of the two cards’ rewards structures:

Groceries

The Blue Cash Preferred gives 6 percent cash back on up to $6,000 in annual spending at U.S. supermarkets (then 1 percent cash back after that). The Blue Cash Everyday only gives 3 percent cash back at U.S. supermarkets with the same annual spending cap (also 1 percent cash back after that).

My family easily maxes out that $6,000 limit, so 6 percent of $6,000 is $360, versus $180 if we were only earning 3 percent of $6,000. However, if you factor in the Blue Cash Preferred’s $95 annual fee versus $0 on the Blue Cash Everyday, it’s really just an $85 advantage for the Blue Cash Preferred ($265 in rewards instead of $180).

Online retail

This is the potential game-changer since the Blue Cash Everyday now gives 3 percent cash back on up to $6,000 in annual U.S. online retail purchases (then 1 percent afterwards). The Blue Cash Preferred only awards 1 percent cash back on all of these purchases. Based on our typical spending habits, my family would max out the $6,000 limit. With the Blue Cash Everyday, that would be $180 (3 percent of $6,000), versus just $60 (1 percent of $6,000) on the Blue Cash Preferred. That extra $120 puts the Blue Cash Everyday ahead by $35 per year after accounting for the grocery rewards and the annual fee.

An Amex representative tells me the Blue Cash Everyday’s online retail category is very broadly defined. “There’s no specific list of qualifying merchants,” the Amex rep says. “It only does not apply to purchases made in store or to services bought online, like travel bookings or online food delivery. But from pet supplies to the latest kitchen gadget to new shoes, and almost everything in between, Card Members will get rewarded with 3% cash back when they shop online, on up to $6,000 per year.”

Gas

Both cards give 3 percent cash back at U.S. gas stations. The Blue Cash Everyday caps that rate at $6,000 in annual purchases (Card Members again earn 1 percent after that), whereas the Blue Cash Preferred does not cap its rewards rate on gas. This is a wash for us, since my family spends well under $6,000 per year on gas. Note that, until recently, the Blue Cash Everyday only offered 2 percent cash back on gas.

Streaming

The Blue Cash Preferred is the winner here since it gives 6 percent cash back on select streaming subscriptions, versus just 1 percent on the Blue Cash Everyday. However, my family doesn’t spend much on streaming services. We’ll probably only spend about $250 in this category over the course of the entire year, so the difference between 6 percent and 1 percent cash back is only about $12.50 for us.

Also, the Blue Cash Everyday has a new streaming benefit: Up to $84 in annual credits for The Disney Bundle. That’s the $13.99 monthly subscription that includes Disney+, Hulu and ESPN+. The discount is applied as a $7 monthly statement credit after spending $13.99 or more each month. While my family doesn’t currently subscribe to this, we have already been considering it. The kids would like Disney+, and I would enjoy all of the sports content on ESPN+, particularly the access to more than 1,000 live National Hockey League games.

Since this would represent new spending, I hesitate to say that we would be “saving” $84 — since subscribing would actually add about $84 to our annual expenditures — but we would make good use of this. And it would be much more cost-effective to subscribe with the Blue Cash Everyday’s discount as opposed to paying full freight with the Blue Cash Preferred, despite the Blue Cash Preferred’s higher cash back payout on streaming services. Paying $13.99 per month would be $167.88 annually and 6 percent of that is just $10.07. The Blue Cash Everyday’s $84 annual discount is much more appealing.

Meal kits

The Blue Cash Everyday also added a $180 annual Home Chef credit (up to $15 in monthly statement credits). My family has sometimes ordered from one of Home Chef’s competitors in the past. We’re not currently receiving any meal kits, so I’m not factoring this into my calculations, but it’s something we might try on occasion.

Transit

The Blue Cash Preferred gives 3 percent cash back on transit, including taxis, rideshares, parking, tolls, trains, buses and more. Before the pandemic, I was spending about $350 per month ($4,200 annually) on train tickets to get to and from the office. Three percent of that represented about $126 per year in cash back. But now that I’m working from home the majority of the time, this rewards category is no longer significant for me. Getting 1 percent cash back on the Blue Cash Everyday wouldn’t represent much of a loss.

The bottom line

I’m going to think about it a bit more, but there’s a good chance I’ll switch back to the Blue Cash Everyday. The math is slightly in its favor, and the timing could be advantageous because my Blue Cash Preferred’s annual fee is due again in the fall. I’ll probably max out the annual 6 percent grocery spending limit by the end of the month, too. Those developments are added incentives to make the shift soon.

Have a question about credit cards? E-mail me at ted.rossman@bankrate.com and I’d be happy to help.